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Gold has traded between $1,210 and $1,219 so far today…as of 10:30 am Pacific, bullion is up $2 an ounce at $1,210…Silver is off 4 cents at $16.51…Copper has climbed 6 pennies to $2.51…Nickel has soared 25 cents to $5.13…Crude Oil has jumped more than $2 a barrel to $47.73 while the U.S. Dollar Index has retreated one-fifth of a point to 101.18…

Holdings of the world’s biggest Gold-backed exchange-traded fund, SPDR Gold Shares, slid more than 19 tonnes last week, its biggest weekly outflow in 4 months…

Currency movements have apparently played a role in Gold purchases by key Gold-buying central banks such as Russia and China, Commerzbank points out…analysts cite news reports that the Russian central bank bought around 40 tonnes of Gold in October, the biggest monthly Gold purchase of this millennium.  “Clearly, the central bank was taking advantage of the stronger ruble – which has made Gold cheaper in local currency – to buy more Gold,” Commerzbank says.  “By contrast, the Chinese central bank bought only around 4 tonnes of Gold last month – the second-lowest Gold purchases since China began publishing monthly figures back in June 2015.  The currency is likely to have played a role here, too – the yuan has been depreciating noticeably since the end of September.” 

If the Chinese currency continues to weaken, expect President-elect Trump to weigh in heavily on that issue as he accused the Chinese of currency manipulation throughout his campaign…

Adrian Day, Chairman & CEO of Adrian Day Asset Management, sees Gold responding well under a Trump presidency due to increased spending, including infrastructure and defense, big tax cuts and less regulation – all combining to create a more pro-growth economy with an inflationary bias.  “With regard to Yellen’s threat for a more ‘hawkish’ Fed to counter-balance fiscal profligacy, we would retort, ‘I knew (former Fed Chair) Paul Volker, and she’s no Paul Volker.  We do not expect sharply higher rates, and further out we will likely see higher U.S. debt (already high) and higher inflation (already stirring).  So the outlook a little further out – combined with easy money around the world, stronger Indian demand, possible geopolitical turmoil, and a decline in mine production – will be a higher Gold price.”

Deutsche Bank:  S&P 500 Will Rally Over Next 2 Years To 2500

Deutsche Bank strategist David Bianco says the market will rally over the next 2 years on optimism about President-elect Trump’s economic agenda.  “We think the market is under appreciating the likely big boost to S&P EPS from a lower corporate tax rate and the boost to bank profits from rising yields (and lower pension expense) and the much higher chance now of a long-lasting economic expansion that rivals the 10-year U.S. record.  We’re more confident now that the S&P will reach 2500 in 2018 before suffering its next bear market.”

Fed’s Burden Reduced:  Fischer

While much of the elitist and liberal mainstream media still hasn’t come to terms with a Trump presidency, and probably never will, the Federal Reserve’s second-in-command understands how a Trump White House and a Republican-controlled Congress will fill the “fiscal vacuum” that has plagued Washington for a number of years…Stanley Fischer is the latest to wade into a post-election debate over what policies the new U.S. government should pursue, saying today that spending and other efforts to boost sluggish productivity could help reduce the Fed’s burden of supporting the economy…

“Certain fiscal policies, particularly those that increase productivity, can increase the potential of the economy and help confront some of our longer-term economic challenges.  Some combination of improved public infrastructure, better education, more encouragement for private investment, and more effective regulation all likely have a role to play in promoting faster growth of productivity and living standards,” he said at the Council on Foreign Relations…

Crude Oil Update

Crude Oil prices are recovering, thanks to OPEC’s de facto leader Saudi Arabia undertaking a diplomatic charm offensive since last week to persuade the group’s more reluctant members to join its proposed output cut…the way we see it, if the Saudis want a cut – and it seems they do – they’ll get one…

Meanwhile, Russian leader Vladimir Putin says he sees no obstacle to non-OPEC member Russia agreeing to freeze Oil output which at more than 11 million barrels per day is at a post-Soviet high…

Barclays on Crude:  “We expect OPEC to agree to a face-saving statement…(but) U.S. tight Oil producers can grow production at $50-$55 (per barrel) and will capitalize on any opportunity afforded to them by an OPEC cut.”

Gold Fields Steps Back (Temporarily?) From Attempt To Acquire Kirkland Lake Gold

Gold Fields (GFI, NYSE) and Silver Standard Resources (SRO, TSX, NASDAQ) have withdrawn their latest joint proposal to acquire all of the outstanding shares of Kirkland Lake Gold (KLG, TSX) in a negotiated transaction.  “In light of the lack of engagement by the board of Kirkland Lake in response to these proposals, and there being no basis to expect any further engagement from Kirkland Lake, Gold Fields and Silver Standard are left with no choice but to withdraw their latest proposal,” Gold Fields announced, adding it “remains interested in pursuing negotiations toward a board-supported transaction with Kirkland Lake in the event that Kirkland Lake’s shareholders reject the Newmarket transaction.”

Check back later this morning for today’s Morning Musings.

1. Oil prices are at their highest level in 3 weeks, catching a lift from a softer U.S. dollar and bullish comments from Russian President Vladimir Putin regarding the potential for an OPEC deal to trim production…Putin said he also saw no obstacle to non-OPEC member Russia agreeing to freeze Oil output, which at more than 11 million barrels per day is at a post-Soviet high…WTIC is up $1.23 a barrel at $46.92 as of 7:00 am Pacific…

2. Metals are firmer across the board to begin the new week…Gold is up $6 an ounce at $1,213 as of 7:00 am Pacific while Silver has added 8 cents to $16.63…Copper has jumped a nickel to $2.50, Nickel has surged 17 cents to $5.05 while Zinc is up 2 pennies at $1.16…

3. The Venture is up slightly at 750 after the first 30 minutes of trading, a recovery of 4.6% from last Monday’s 5-month low of 717 which has a good chance of holding prior to favorable seasonality factors that kick in during December…the Dow and TSX are up modestly in early trading…

4. AQM Copper (AQM, TSX-V) is up sharply this morning as it’s being acquired by Teck Resources (TCK.B, TSX) for 23 cents a share in cash or an implied total equity value for AQM of $35 million CDN on a 100% fully-diluted basis…AQM’s principal asset is a 30% indirect interest in the Zafranal Copper-Gold Project located in southern Peru, approximately 70 km north of Arequipa…Teck already holds a 50% indirect interest in the Zafranal Project which has a mineral reserve of 401 million tonnes grading 0.40% Cu and 0.07 g/t Au…the project’s initial capital cost is $1.16 billion (U.S.), the after-tax IRR is 15.9% and the payback period is 5.1 years…

5. Canada Zinc Metals (CZX, TSX-V) is one of the Venture leaders in early trading, up 5.5 cents at 41.5 cents…resistance in the mid-40’s…the rising 100-day moving average (SMA,), currently 35 cents, has provided unwavering support throughout the year…Teck and partner Korea Zinc Co. Ltd. started a drill program at the Pie-Yuen-Cirque East properties, optioned from Canada Zinc, in September…

6. Veritas Pharma (VRT, TSX-V), in the process of completing a $1.4 million private placement at 30 cents per unit, announced this morning that it has signed an LOI with Sechelt Organic Marijuana Inc. whereby Veritas has been granted the exclusive option to acquire 100% ownership of the privately-held company subject to certain terms and conditions…VRT climbed as high as 45 cents and is off a penny at 42 cents as of 7:00 am Pacific…

7. Savary Gold (SCA, TSX-V) has initiated its largest-ever exploration program at its Karankasso JV project in southwestern Burkina Faso..the $3.5 million (CDN) program will consist of up to 21,000 m of drilling, 12,000 m of auger drilling, approximately 275 line km of gradient IP geophysical surveys and collection of up to 3,000 soil samples…the initial planned holes are designed to extend the in-pit Inferred mineral resources at the Karangosso, West Trend, Diosso South and Kueredougou West Zones…

TSX Venture Exchange and Gold

It was another volatile week as the Venture plunged Monday morning to a 5-month low of 717, just 9 points above a strong support level, followed by an immediate 5% reversal to an intra-day high of 756 Wednesday.  For the week, the Index closed up 19 points or 2.6% at 748.  Non-resource stocks again led the way, though one standout in the Oil sector was Blackbird Energy (BBI, TSX-V) which jumped 30% on high volume on very positive news Friday morning.

The fact the Venture is holding up as well as it is in the face of an exceptionally strong U.S. dollar and weakness in Gold is a positive sign with just 18 more trading sessions before a likely Fed rate hike which should kick start a pre-Christmas turnaround and a powerful finish to the year.  In the meantime, where can some money be made?

Click here to read the rest of today’s Week In Review And A Look Ahead, and learn more about where the Venture is headed in the coming weeks, with a risk-free Pro, Gold or Basic subscription featuring a 100% money-back guarantee, or login with your username and password.

Gold has traded between $1,203 and $1,217 so far today…as of 10:00 am Pacific, bullion is off $10 an ounce at $1,206…Silver is 11 cents lower at $16.53…Copper has retreated 3 pennies to $2.46…Crude Oil is up slightly at $45.53 while the U.S. Dollar Index has jumped one-third of a point to 101.33…

Recent outflows in global Gold exchange-traded funds have now exceeded all of the inflows since July, according to Commerzbank…global ETF Gold holdings fell again yesterday after a number of big daily outflows lately, including one of 13.6 tonnes Tuesday and two of roughly 16 tonnes at the end of last week…

Gold, unlike some other metals, is not yet responding to potential inflation down the road, meaning longs do need patience…another factor that could help bullion is the likelihood of a jump in the U.S. budget deficit…the greenback has momentum on its side, constraining Gold, leading up to the December 13–14 FOMC meeting when the central bank is expected to hike rates for only the 2nd time in more than a decade…expect a “sell on news” event in the greenback when the Fed finally pulls the trigger (or just before)…

Ivanhoe Mines (IVN, TSX) and its joint venture partner, Zijin Mining Group Co., have signed a landmark agreement that confirms the support and desire of the government of the Democratic Republic of the Congo to be a prominent partner in the development of the high-grade Kamoa-Kakula Copper Project…the agreement transfers an additional 15% interest in Kamoa-Kakula to the DRC government, increasing its total stake in the project to 20%…Ivanhoe and Zijin each hold an indirect 39.6% interest…

“This is a historically significant event for the people of the Democratic Republic of Congo,” stated Robert Friedland, Ivanhoe Executive Chairman.  “We now are united as partners committed to working closely together toward our shared objective of ensuring that the major Copper discoveries we have made at Kamoa and Kakula during the past 8 years can be predictably, efficiently and expeditiously developed into a world-scale mining venture with a lifespan of multiple generations.”

IVN is down slightly this morning at $2.03 but its chart and prospects look strong entering 2017…

Dollar Index 1-Year Daily Chart

The U.S. Dollar Index has made a big move since the U.S. elections, pushing once again into overbought RSI(14) conditions on this 1-year chart while measured Fib. resistance at 101.30 is being challenged…the high dollar is not helpful to a U.S. economic recovery and it’s also a counterweight to the Fed’s hope of seeing inflation gain traction above 2%… the dollar may not cool off until news of a likely rate hike next month is out of the way…

Dollar Index Long-Term Chart

When examining this long-term monthly Dollar Index chart, one wonders what’s going to prevent the greenback from surging higher during 2017 given the recent U.S. magnitude 9.0 political earthquake…a major breakout has been confirmed above a long-term downtrend line while RSI(14) has formed a bullish “W” and is accelerating to the upside…

Quite possibly, 2017 could prove to be the most consequential tax policy year in the United States since the Second World War…that has some analysts musing that the Dollar Index as a result could easily climb another 10% over the next 12 months…a wave of inversions due to foreign companies suddenly wanting to have their headquarters in the U.S would certainly put upward pressure on the greenback…

Expectations are high among many investors now that U.S. growth will ramp up under the suite of new policies that will soon be ushered in by President-elect Trump and a Republican-controlled Congress…while those initiatives are a welcomed departure from years of policies that have suffocated U.S. growth, forcing the Fed to maintain record-low interest rates for an extended period, it’s important to note that the effect won’t be instant and the full impact may not be felt for a couple of years…however, the market is a forward-looking machine and it’ll be anticipating higher growth and a pick-up in inflation despite a stronger dollar…

While there’s typically an inverse relationship between the dollar and Gold, there have been times over the past few decades when bullion and the greenback have moved higher together (1982, 2001, 2005, and periods during 2009 to 2011 are good examples)…significantly, most of those were years in which a worsening trend in U.S. annual budget deficits materialized…that’s a theme that could play out in 2017…

In Today’s Morning Musings…

1.  A nice HIT with this play before Christmas…

2. Volatility continues in cannabis stocks – fresh look at Canopy Growth (CGC, TSX)…

3. Accumulate this one in the “sweet zone”…

4. The world is looking up – Kopin (KOPN, NASDAQ) hits a 2016 high…

5. Daniel’s Den – Jack Stoch pulls off a deal Trump would be proud of…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

Check back later this morning for today’s Morning Musings.

1. Gold hit its lowest level ($1,203) since late May overnight before reversing as the dollar surged to a near 14-year peak on expectations for a U.S. rate hike next month and a pro-growth agenda from the incoming Trump administration…bargain hunters stepped in just above $1,200 an ounce and bullion is now off just $5 at $1,211 as of 7:00 am Pacific…Silver dipped into the $16.40’s overnight but is now up 4 cents at $16.68…Zinc prices are close to another new multi-year high, up 2 pennies at $1.16…

2. Holdings of the world’s largest Gold-backed exchange-traded fund, SPDR Gold Shares, fell another 5.6 tonnes yesterday to their lowest since June…holdings are down by nearly 30 tonnes since the U.S. elections…

3. Bonds around the world are headed for their steepest 2-week loss in at least 26 years with inflationary expectations on the rise…

4. Greece has approved a permit application by Vancouver-based Eldorado Gold (ELD, TSX) to build a plant at its Skouries Gold mine in northern Greece, a senior Greek energy ministry source said today…after years of confrontation with the Greek government over environmental concerns, Eldorado halted development at its project in the forested Halkidiki peninsula in January…it laid off most of its 600 workers, saying the government had been delaying necessary permits…

5. Barclays has upgraded Teck Resources (TCK.B, TSX) to “overweight” and raised its target price 60% amid an uptick in commodity prices…Barclays’ analyst Matthew Korn expects Teck to outperform as all mining companies become more attractive investments on new-found strength in commodities…prices of met coal, one of Teck’s biggest resources, have risen about 160% this year…Barclays has nearly doubled its 2017 annual earnings estimate for Teck to $6.67 billion (before interest, tax, depreciation and amortization) on the assumption that Coking Coal prices will settle around $234 a tonne…

6. Hit Technologies (HIT, TSX-V) is breaking out above a downtrend line going back to late 2015, showing fresh technical strength after closing at 6 cents yesterday on volume of more than 2 million shares…HIT is up another half penny at 6.5 cents as of 7:00 am Pacific…the company is making its first large retail foray into the wider accessories market over the Christmas shopping season…updated chart in today’s Morning Musings…

7. Blackbird Energy (BBI, TSX-V) continues its strong run with the stock gapping up this morning on positive news…it’s one of the Venture volume leaders through the first 30 minutes of trading, up 7 cents at 61 cents on nearly 2 million shares…

Gold has traded between $1,222 and $1,232 so far today…as of 9:30 am Pacific, bullion is flat at $1,225…Silver is 5 cents lower at $16.91…Copper has gained 2 pennies to $2.49…Nickel is off a nickel at $5.07…Crude Oil has added 31 cents to $45.88 while the U.S. Dollar Index has jumped nearly half a point to 100.61…

In her testimony before Congress this morning, Fed Chair Janet Yellen made her strongest case yet for a rate hike at the Fed’s next meeting December 13-14:

“Were the FOMC to delay increases in the federal funds rate for too long, it could end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of the Committee’s longer-run policy goals” on inflation and jobs, Yellen said. “Moreover, holding the federal funds rate at its current level for too long could also encourage excessive risk-taking and ultimately undermine financial stability.”

While stating the case for an imminent hike, saying one is “appropriate relatively soon”, Yellen also repeated her pledge that subsequent moves will come at a gradual pace…

The best thing for Gold and the Venture would be a December rate hike, so we hope Ma Yellen has the courage to pull the trigger and deliver that early Christmas gift for investors…with the much speculated hike finally out of the way, Gold should quickly regain traction and also start focusing on a potential ramping up of U.S. budget deficits…

Meanwhile, Yellen put to rest rumors she may resign now that there’s new political leadership in Washington including a President-elect who has been publicly critical of the Fed chair.  “I was confirmed by the Senate to a 4-year term, which ends at the end of January of 2018, and it is fully my intention to serve out that term,” Yellen told Congress this morning…

Positive Economic Data Strengthens Case For Rate Hike

U.S. housing starts surged to a more than 9-year high in October as builders ramped up construction of both single and multifamily homes, offering hope that housing will contribute to economic growth in Q4…meanwhile, consumer prices recorded their biggest increase in 6 months in October on rising gasoline costs and rents, suggesting a pickup in inflation, while the number of Americans filing for unemployment benefits fell to a 43-year low last week…

BHP On Iron Ore & Coking Coal

BHP Billiton (BHP, NYSE), the world’s biggest miner, expects soaring prices of Iron Ore and Coking Coal to moderate even as China pushes ahead with efforts to restructure its steel sector…prices have been supported in recent months by restocking and short-term supply disruptions, CEO Andrew Mackenzie told reporters today in Brisbane following the company’s annual meeting…Iron Ore has jumped 66% this year to rebound from 3 straight annual declines, while Coking Coal has surged about 295%…

Euphoric Top In Marijuana Stocks?

Yesterday’s wild trading action in a number of marijuana stocks, which triggered circuit breakers on multiple occasions, is clearly indicative of at least a short-term top in the sector, and individual plays show extreme RSI(14) overbought conditions…the heightened volatility comes ahead of a Task Force on Marijuana Legalization report to be delivered at the end of the month…the report will provide a roadmap for how the federal Liberal government goes about implementing a legal recreational marijuana market…the market, which could be worth as much as $10 billion, is expected to launch in 2018…

Meanwhile, the Globe and Mail reported this morning that cannabis could be effective in weaning Canadians addicted to opioids off the deadly drugs, according to a University of British Columbia study that examined existing research on how marijuana affects those with mental-health and substance-abuse issues…the Globe’s Mike Hager wrote that Zach Walsh, a clinical psychologist and cannabis researcher who led the study, says the research shows many people are using cannabis to replace or lower their intake of heavier medications, though he cautioned that more medical trials are needed to prove how marijuana is helping those addicted to opioids. “We need to explore the possibility that someone could substitute cannabis for an opioid and, most addiction professionals would agree, that cannabis is an easier habit to kick,” said Dr. Walsh…

In Today’s Morning Musings…

1. Updated Venture chart…

2. Heart of Gold Camp’s Captain Kirkham!…

3. Morumbi Resources (MOC, TSX-V) on track to complete Honduras Zinc mine acquisition by year-end…

4. Doubleview Capital (DBV, TSX-V) on the cusp of a breakout…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…